Student Loan Debt, how do you deal with it?

[truckerofbc]

I have been paying down my debt for 7 years now. I just let Revenue Canada take my year end taxes to pay down the debt plus I also make some small payments to them. Next year filing for (2010) will be my last year tax year and the loans will be paid off. Been a long road considering most of it has been interest accrued that I have been paying, but with a larger family I'd rather they garnish my tax return than pay more and pay what I can't afford and live pay cheque to pay cheque.

[momstaxi]

I am still paying on my st.loans that I have had for about 4 yrs now I just pay monthly and proud to say that I have finally paid of one of my part time ones. I have saved enough $ on here to pay 2 months of daycare for ds which freed up extr $ for the loans.

[jayne_a]

I have a student loan and i owed approx $20,000 to govern, and $5000 to the bank plus i couldn't get another loan so i used my credit cards for one year (approx: $6000) I have paid off the all but $15,000 to the govern and i'm not making a dent in it at all! The interest is killing me. So my husband and i decided that when we move to sask this summer, he will pull out a low interest loan (from the bank) to pay it off. I can have the darn thing payed off in 4 years, this way. As compared to when i'm 65 I would suggest not getting a student loan if you don't have to. I am the daughter of a poor farmer so i didn't have much choice. But if i could do it over again, i would never have gone to school had i known all this. Plus I've never been able to get a job in my field, and I graduated 6 yrs ago.

[nadiabreckon]

I have a student loan and i owed approx $20,000 to govern, and $5000 to the bank plus i couldn't get another loan so i used my credit cards for one year (approx: $6000) I have paid off the all but $15,000 to the govern and i'm not making a dent in it at all! The interest is killing me. So my husband and i decided that when we move to sask this summer, he will pull out a low interest loan (from the bank) to pay it off. I can have the darn thing payed off in 4 years, this way. As compared to when i'm 65 I would suggest not getting a student loan if you don't have to. I am the daughter of a poor farmer so i didn't have much choice. But if i could do it over again, i would never have gone to school had i known all this. Plus I've never been able to get a job in my field, and I graduated 6 yrs ago.

I agree! I had a 6500$ gov't student loan, as well as a 5000$ line of credit co-signed by my dad (I was only 18 at the time, and didn't have credit), and it took me almost 10yrs to pay it off (I was in a bad relationship). My dad paid off my line of credit, and when I paid off my smallest studen loan to the bank, I was so happy! I in turn put those payments into RRSP's instead, trying to make it work for me. Needless to say, I don't have much in there, but it's a start...

[lecale]

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[Insane]

I went to school in the 90's but I think a lot of the program terms have not changed:

If you want to pay off a lump sum, you will have to pay a "penalty"...so do the math and see if it is worth it. If you're just a little ways away from paying off your loan, it may be cheaper to keep making payments rather than one lump sum payment. Try to do the right thing and they go and punish you Try bumping up your monthly payment instead.

Had a choice when repaying - floating rate + 1% or fixed rate + 2% or something similar. Floating rate was a much better deal. Fixed rate = locked in at interest rate at the time of signing your paperwork plus 2%. Floating rate = always paying current interest rate + 1%. With interest rates low and rising only slowly, you can see how I picked.

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There is no longer a penalty for making a lump sum payment...at least not in Ontario.

And the interest on the OSAp is S_T_U_P_I_D....it's prime +2.5% or fixed at prime +5% (I think)!!!!!!!!! It's awful!

[lecale]

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[Insane]

Ya, mine is 4.75%. There really isn't a distinction between federal and provincial anymore. Well there, but it isn't like it was before. It's all a consolidated loan. I pay 4.75% right now. It was as high as 7.5% at one point. I think the fixed rate is ridiculous!

Truthfully, I think government student loans should be interest free. The only reason we pay interest is to make up for those that default.

Although I have to admit the new repayment assistance things seem better.

[haneylaw]

I have a question, if you file your taxes as common law, will osap automatically know that you are common-law and hence then consider the income that your partner makes your income too? I know you can apply for interest relief if you make under a certain amount a month, but if you are married obviously it is your household income and not just yours, but is it the same for common law?

I'm somewhat speculating, but this happened to friends. When they filed as married he was DENIED student loans that year because they "jointly" owned a nice truck. He was told that he should sell the truck to make his school payments. So I would assume the information is shared. And remember, you do not have to file as common-law. Make sure that it will work for you as a couple before you do. I got screwed the first year!

And I got out from my low-interest, low payment, maybe it'll be paid in 35 year student loans by getting a consolidation loan. There's no right answer, you're really between a rock and a hard place when making that decision.

[lecale]

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[khipson]

My student loans were at 10%, so 5% sounds pretty good to me!

Before we were married, DH had student loans that went into collections due to him having no employment for quite a while (but well after he was done with school). I don't know what his interest rate was, but that was the first time I ever dealt with a creditor and the guy was HORRIBLE. What blows me away now is that we weren't even married yet and he was openly talking to me about DH's account... even made a comment once about "what kind of guy I was with". It was nasty. I know so much more now that I wish I could go back and have those conversations over again. LOL

Anyway, no you can NOT bankrupt on any government student loans. Right along with owed taxes, they are exempt from bankruptcy. So if you're considering that route, keep in mind that you'll be able to bankrupt the bank loan only, and then you'll come out with a ruined credit rating AND a still owing a student loan to the government.

What we did was roll his loan into my line of credit which was 7% at the time, which lowered the payment amount but also made it so we could pay extra whenever we had it. (The downside to a line of credit is that then you tend to use the credit over again.)

Like Natalka said, we fought through it and paid them both off, because we borrowed the money in good faith.

Incidentally, neither of us is working in the fields we went to school for, either. I wonder how many people that is actually true for?

[Insane]

The problem with rolling the student loan into a bank loan or a LOC is that once you are out of the gov loan business you loose the ability to use the interest as a tax deduction. I'm not sure if anyone has ever calculated whether the tax deduction is really worth it though.

[Eeyah]

I am so glad I worked my tushie off! I was a full time student, held down a full time job AND worked evenings at a video store(GPA was 3.8!). I did this for 3 years! I had no life what-so-ever but man does it feel good to not have that burden of debt 4 years ago dh decided to go back to school to become an electrician and since it was a spur of the moment decision we didn't have the cash set aside, and it also ment that he had to move 1.5 hours away (also meaning he had to rent a place). THANKFULLY my parents let me move back into there basement suite and pay minimal rent (my share of the utilities) my dad ended up co-signing a line of credit for dh (dh's parents credit was HORRIBLE - how sad is that, that they couldn't help there son out with a small 2,500 loan/LOC) ANYWAY....every year dh uses the LOC to pay for his 2 month course, promptly pays it off once school is done, and the extra money available (though proud to say we've never had to use it) is there if we need it.
I strongly recommend that if you chose to go to school, pay for it as you go, I am soo happy that I don't have the burden of gov't loans following me around and haunting me. I think education is super important but when you are working your ass off to pay for it every semester it also gives you the drive to excel - no way was I about to fail a class that cost me $700!

[Insane]

I'm somewhat speculating, but this happened to friends. When they filed as married he was DENIED student loans that year because they "jointly" owned a nice truck. He was told that he should sell the truck to make his school payments. So I would assume the information is shared. And remember, you do not have to file as common-law. Make sure that it will work for you as a couple before you do. I got screwed the first year! .

Oh their car policy infuriates me. We leased a car. It was just too difficult to get my son to daycare and get to class by 8:30 using buses/shuttles. Plus he was awful on the bus. My son hit a 70yr old man once and told him to "get off my bus". The buses were overcrowded and at 2 he just couldn't handle it. So for our sanity and other reasons we leased a car. But OSAP looked at the value of the car! They didn't care that it was leased and not technically ours!! It was awful. So, we got a mechanic to do an apraisal on the car. The other thing we contemplated was putting the car in one of our parent' names. It such a ed policy. I remember a few people (like med students) who needed a car for work but were penalized on OSAP for it.

[fleetingleaf]

wow...I guess I am lucky and really managed my finances very well...as I had no debts after graduation was actually doing quite well

The co-op program was the key factor, all the money from each co-op job payed for food/rent while on work term and also the tuition/rent/food for the school term that followed. Living situation was pretty crappy since I shared with lots of roomies...but hey rent was super cheap, a little over 200/month during the last two years. the other thing was the RESP my parents had for me, that gave me a bit of money each school term as well. Plus it was all about the biking/walking everywhere and cooking all my meals.

Then in the last year, I stayed on part-time at the company where I was returning full-time and made quite a bit that way. Which really helped with all the expense from transitioning to the real world with more expensive rent and needing to buy a car.

What sucks is my bf has a pretty big loan to pay off, so he's gotta work away at that. So I'm feeling the pain just a bit.